Duplex under contract, must occupy, which tenent would you evict?

Question

Unit 1 - 3/2 with 5 people and 3 dogs living in the unit. month to month lease paying 1050 a month. guy is nice but they have a ton of clutter. as well as dogs that are not on lease. resident for 2. years. always paid on time. fixes things himself. hes a maintenance guy at a commercial building. havent seen credit or BG yet.

Unit 2 - 3/2 with older disabled lady, 20 something daughter lives with her. small lap dog as well. shes paying 889 a month. resident for 12 years. pays on time. nice and unit is well kept and clean. daughter and dog not on lease. month to month lease. fixed income. uses a walker. mentally sharp. havent seen credit or BG yet.

Rental Comps are 1200 to 1400 a month. both units are well under market rents. I self manage (for now) owner had the property for 20 years, didnt manage it well, no one is screened properly. my wife and I must occupy the property so one must go. this is a class C community. inspection shows the systems and roof of the home to be in good shape.

what would you do?

Thanks BP family

Michael Peters · Answer

I agree with @Anthony Wick here. If you can sustain some vacancy and turn over costs I think this is the best move. If not the 5 people and 3 dogs will only cause more damage the longer they stay specifically if they are already violating their lease. If your feeling guilty regarding the older lady, as some of the other comments are hinting at, have a conversation with her to see what her financial situation and that of the daughter. Rent definitely needs to be higher but you can possibly make it more bearable by getting the other person on the lease, if they are worth keeping. If you keep any of them make sure to get an Estoppel Certificate. @Nathan G. shared this link in another recent post that had some great information on it.https://eforms.com/rental/estoppel-certificate/

Nathan Gesner · Answer

By the way, $400 below market is $4,800 a year. I bet there's not a Landlord on here that would donate $5,000 to help her pay rent, even though that's exactly what they will suggest you do.It's OK to charge someone what something is worth. She could get rid of the free-loading relative, downsize to a one-bedroom, and be just fine.

Scott Anderson · Answer

What if neither leave? You have to occupy within what? 60 days?Sounds like a mess to me.

Anthony Wick · Answer

@Michael B.First, you’re not “evicting” anybody. They’re on MTM leases. At worst, you can terminate their lease and tell them to move out. No eviction, unless they refuse to move. Now, I wouldn’t do any of that. I would write in purchase agreement that seller must deliver both units empty, and clean. I don’t want either one of those tenants. Barring that, give notice to terminate leases immediately after close.Clean one unit so that it is tolerable to live in. Move in. Turn the other unit to get market rate rents. Then Upgrade your unit over the course of the year in order to rent that out when ready.

Nathan Gesner · Answer

I would start with the five people with unauthorized dogs. That's incredible wear-and-tear on a home and I can pretty much assume they are trouble.i would keep the elderly lady, but only for a while. She can't afford what it's worth. I would give her 3-4 months to find something better suited. Maybe she could downsize and get rid of the Leach relative.

Mary M. · Answer

I would remove the person with the dogs. But you might just ask them both if they might like to move if you gave them x $$ ... But if it were me, I would want the long term tenant just ad her daughter to the lease

Drake Schmid · Answer

@Michael B.Both tenants should go immediately. Fix up the nicest one get a qualified tenant in there ASAP then work on your personal unit. Tenant Laws are very friendly to you if this is your primary residence. This is your home so I would suggest a much more stringent vetting of the tenant. The short term costs of replacing with a good tenant will be minor if you get the unit to market rates immediately. Congratulations on the purchase!

Michael Noto · Answer

@Michael B. Simple answer for me, but all things considered who do you feel most comfortable living with? Personally it sounds as though the people paying the higher rent live a little more of a chaotic/disheveled lifestyle from your description and add to that their unit sounds like it will require a major turnover when they vacate. I'd get that tenant out for those reasons.

Lynnette E. · Answer

I would choose he elderly long term tenant. WHY? Because that is who I would want to live next to, nice, neat and pays on time. My enjoyment of my home is more important than a hundred dollars a month.

Bryan Richardson · Answer

@Michael B.Ask your self who you want to live next to. Your going to share a wall/yard/property with these people.